The deceased, 44, a major in the armed forces, died on 13 December 1990 due to high fever. Prior to his death he bought a total of ten units in the group insurance scheme policy of the respondents/defendants, Arab-Malaysian Eagles Sdn Bhd, through the Koperasi Tentera. He named his wife, the appellant/plaintiff as the sole beneficiary. The insurer paid her only for the five units which the deceased bought on 1 May 1981, while the insurer denied liability for the balance five units which were bought on 10 July 1987. It is in respect of this that the appeal lies.

The defendants refused to pay her on the ground of non-disclosure of a material fact by the deceased in the proposal form (exh D6), dated 10 July 1987. The plaintiff sued the defendants for the sum of RM89,500 being the assured amount for the additional five units, and interest thereon.

The defendants alleged that the deceased had breached the condition under cl 8(d)(i) of the Second Schedule to the group policy No GP 1025 (exh D7) in that he had made a declaration in cl 5claiming that:

Saya mengaku Darjah Kecergasan Tubuh (DKT) saya adalah FE pada masa

saya menandatangani borang permohonan ini. Saya juga mengaku bahawa

saya adalah di dalam keadaan kesihatan yang baik, tidak mempunyai

penyakit yang berlarutan atau berulang, sakit jiwa/otak dan

lain-lain kecacatan/ kelemahan tertentu pada masa saya menandatangani

borang permohonan ini. (Emphasis added.)

According to the medical report (exh D2) however, he was diagnosed as suffering from diabetes since February 1986.

Clause 8(d)(i) of exh D7 provides:

(d) Exclusions:

This group insurance scheme does not provide coverage on

deaths or accidents arising from or under the following

situations:

(i) Prolonged illnesses which have been diagnosed

prior to the date of joining the insurance scheme

based on the contents in the medical report of the

deceased. (Emphasis added.)

The learned sessions court judge in dismissing the plaintiffs claim ruled at p 11 of record as follows:

Mahkamah pada penemuan faktanya memutuskan bahawa mahkamah meragui sama

ada benar pada 10 Julai 1987 si mati tidak mempunyai penyakit yang

berlarutan. Ini adalah kerana pada ujian bulan Februari 1986 dan bulan

Januari 1987, dia didapati mengidap penyakit kencing manis, satu

penyakit yang berlarutan.

Encik RG Naidu, leading counsel for the plaintiff submitted that more than two years had lapsed after the life policy was effected and hence s 15C(4) of the Insurance Act 1963 (the Act) applies to the present case. Encik Mohd Roslan bin Hassan, learned counsel for the defendants shared his view on this point. Counsel for the plaintiff further argued that the non-disclosed fact must not only be material but should also have been fraudulently concealed, and stressed that the burden is on the defendants to prove the non-disclosure. I agree with his submission. It is trite law that the burden of proof is on the insurer to prove non-disclosure and that they have the right to begin (see Goh Chooi Leong v Public Life Assurance Co Ltd [1964] MLJ 5 ). The policy has been in force for more than two years and therefore s 15C(4) of the Act rightly applies to this case.

Section 15C(4) provides:

No life policy ... shall, after the expiry of two years from the date

on which it was effected be called in question by an insurer on the

ground that a statement made in the proposal for insurance or in a

report of a doctor, referee or any person, or in a document leading to

the issue of the policy, was inaccurate or false unless the insurer

shows that such statement was on a material matter or suppressed a

material fact and that it was fraudulently made by the policyholder

with the knowledge t